What Companies get WRONG about Leadership, and how to Fix it! - Beth Steinberg

0:00You know, I have a model. It's not my model, but it's culture, structure, talent, management systems, and process. And that's how I think about scale. Most companies never think about structure. What would happen if we just told the truth? Welcome to TruthWorks, where we dig into the nitty gritty of leadership and work. And what needs to change? I'm Jessica Neal. And I'm Patti McCord. Our journey together started in HR, but trust us, it's evolved into something wild, honest, and well, a bit rebellious. So throw out the handbook. We're here to redefine rules to work for us, not against us. Let's dive into another episode.

0:53Hello, everyone. Welcome to TruthWorks. I'm Bob Sutton. I'm guest hosting in place of Patty McCord. Jessica has let me do it. And today's guest is my friend, Beth Steinberg, who if I introduced her and described all the different places she had worked in HR, been a chief people officer, that's all we would talk about for the remainder of it. The first time I heard Beth's name was when I was, this would have been 2006. Yeah. When I was working with a guy named Chris Cox, who was a 24-year-old chief people officer at a company called Facebook, and Beth had just left. But I met her in person just a few years ago.

1:39We've been hanging out ever since when she was chief people officer at Chime. And, Beth, maybe you should just start out just to warm us up. Because, like Jessica, you've had real jobs. I'm like me. I'm just an academic. Yes. just maybe you could just describe maybe your favorite job in in people or hr and what you learned from it and then and then jessa can jump in because you actually she actually understands how these jobs work and what it feels like so what's your favorite job unfortunately and fortunately uh so what was kind of your favorite uh job and lesson from it since we had like 20 of them or something.

2:19Yeah, that's a good question. And, you know, thank you for having me here, Bob and Jessica. Yeah. Thank you for joining us. I have worked at a lot of a lot of companies, both sort of, you know, larger fortune 500 companies, but my real love is startups and scaling emerging companies. And I would say I've had a lot of great jobs. But I think I was at a company called Sunrun, which is a solar startup, which is still around. But I think I was like employee 75 or something when it was really scaling. And it was hard, but I think there was so much joy in the work because it was the first company that I worked at that was like 100 % mission driven because residential solar really wasn't a thing.

3:14And not only were people very motivated by working at a mission-driven company because of climate and all that, but they were also disrupting a very stodgy energy industry that needed disruption. And so it was just really exciting, even in the hard times, You know, you had all these amazing people that, you know, you could rely on. And to this day, there's a huge group of Sunrun alum that are just super, super close. And I have found for myself that I do best in disruptive companies. You're working on one right now, right? I am. Yeah, I'm doing a bunch of different things right now. But yes, I am doing some stuff for one of the companies under X at Alphabet, a company called Tapestry that is also disrupting the energy space and the energy grid.

4:13And I actually got there through people at Sunrun because we've stayed connected for so much of this time. And that was 2011, 2012. It was a long, long time ago. Well, that's why you got to keep your connections close. Totally. You never know what's going to be. So Beth, your story is so fascinating. So you grew up through the people world, right? Yeah. By accident though, it was never, it was never my, my intent, you know? Yes. I think now people go to school, you know, for it, but I sort of fell into it. They did. I'm too old. It did not exist at the time. So I felt fell into it by accident.

4:53And then, yes, grew through it, sort of feeling like, boy, this is a place where I can actually add value to a company by helping people be better. And that was, you know, that was and is, you know, in its truest form, very, very appealing to me. Beth, did you start at Nordstrom? Do I remember this? I did. I did. Nordstrom was the first company that I ever worked at. I think it's the first job I ever had. And I did stuff during grad school for Nordstrom. And then they were, I always wanted to be a clinical psychologist. But then when I was in school to be a clinical psychologist, I realized I don't want to be a clinical psychologist.

5:36And Nordstrom was opening up the Midwest region and asked me to go be in HR. I'd never done that before. So I decided to go and leave San Diego, California and move to Chicago, Illinois, and subsequently opened many of the stores in the Midwest for Nordstrom, probably hiring and training like in excess of 10 ,000 employees. So that was really kind of trial by fire into my first HR job. Well, yeah, and list some of the companies that you've worked for, because I don't think our listeners know. You've worked for some pretty impressive companies. Yeah, some good ones. So Nike, EA. EA was really my first, I think, big, big job.

6:24A lot of good HR people came from EA and worked under both Rusty Roof and Gabrielle Toledano, who, you know, Gabby's just phenomenal and was an amazing leader. And then, you know, mostly startups. So I was at Sunrun, as I mentioned, I was at Meta, Facebook in the early, early days when it was quite chaotic, kind of a crazy place. I was at a company, Brightroll, that got acquired by Yahoo. I was lastly at Chime, where I was the chief people officer for many years. And then I've done some other kind of, novel things like I worked at a venture capital firm doing people stuff. So I have been very fortunate to have worked for some really terrific companies.

7:16And I will say that having met the folks at Chime, especially people love working for Beth too. Her team just loved her. They really did. As I them. Well, we were talking before we started recording about the, I think you said And a friend of yours said, if you take another chief people officer role that, what were their words? Well, he said to me, I will really think you're stupid if you take another chief people officer role. And, you know, in all seriousness, it's just a really, really tough job. Yeah. I think it always was. but sort of post during COVID that timeframe, it became even, I think, more difficult.

8:02Yeah. And it continues to be difficult as sort of, you know, the employee, you know, pro employee companies turn to like non pro employee companies, you know, you see these shifts and leaders have to adapt to them. And then, you know, Jessica, I'm sure, you know, you know, this not always is this role respected in the same way. Now, I've been quite lucky that I have not found that so much for myself. I think part of it because I just wouldn't let that happen. You know, I wouldn't get into my head that this is not, you know, an important role. So I think it's just a really tough role. Yeah, I know.

8:43So Laszlo was on a bit ago and, you know, we started talking about there's like one headwind with this role. It's not that it's not strategic or it's not important or whatever, but everybody thinks that they can do it. Right. They do. Yeah. Like it's it's it's different than being the chief park officer. It's different than being the CFO. Like, yes, the organization doesn't question those executives the way that they question. Yes. This one. And then to your point over the last few years, everything that has been piled into this role, whether it's you're the chief medical officer, you're the chief diversity officer, now you're the AI strategist, you know, and you are also the HR strategist in the normal job.

9:34But, you know, you have all these other roles as well. So I think it is just very complex. And unless you've been in it like we have, it's really hard to understand that complexity to a full degree. I agree. I agree. I agree. And I think, Bob, you maybe said this to me, you know, years ago, that this role in certain ways has become the pain sponge for the organization. And but it is true. And I think. Yes. I think you said it to me, but that's okay. You know, it is, that's hard. That's a, that's a, that's a big burden to bear, you know? And I think sort of the balancing of, you know, I always viewed my job as, you know, my role is to drive business objectives through people, right?

10:32That's my role. And I think you're sort of like damned if you do and damned if you don't. If you care too much about people, why are you doing that? If somebody is upset about something and you didn't address it exactly how you were supposed to, why didn't you do that? So you're really sort of caught in the middle. And I coach a few more junior chief people officers right now. And what I have said to them is your job, and I got a lot of this from Patty, your job is not to make people happy. That is not your job. That's an impossible proposition. Your job is to try to create the conditions for high performance inside your company.

11:18That's how I view the job. It's much more complicated than it seems. Yes. I was talking to someone and other two people I was like, just get used to making people unhappy. That's right. Like that. That's right. You know, it is true. And it's like, and some days you'll just be surprised. They'll be happy with you and take it and put it in your pocket and save it for later because it's a really rare thing. Exactly. The amount of stuff that you just have to let roll off your back. No doubt. You know, and it's like, I wasn't always good at that either. I have to say, I mean, I think grow into that.

11:57Yeah. Yeah, I think as I matured, I realized not every problem I can solve, not every problem I should try to solve. I can't beat myself up about that all the time, thinking, gosh, I could have done better. I should have done more, which is probably a lot of women probably do that anyway. But you have to – it's hard because you have to feel very close and personal for employees. I believe you need to have that relationship, but you also have to have a thick skin and depersonalize a lot of things to sort of like get through the day, quite frankly. So I want to ask maybe both of your questions. We can start with Beth.

12:40Both of you, well, you have experience with a lot of different CEOs. So part of your job from talking to both of you, especially Beth I've talked to about this, is knowing when to push back against the CEO and knowing when, well, I might not agree with it, but I got to do it anyway. So how do you deal with that? How do you advise your mentees to deal with that? Yeah. I mean, so, yeah, it's a great question. And I don't know that I have a perfect answer for that. I have and always have had what I feel in my head is a line that cannot be crossed. And that's around anything unethical. I just won't cross that line.

13:23So to the extent that anything unethical in my mind was happening, I felt like I'll take the lumps. I have to address this. This is my job. Not everybody is going to have the cojones to say this to a senior leader, but that's sort of like what I signed up for. But you disagree with people around you all the time, I found, on little things like maybe small hiring decisions, not big ones, maybe a way that a culture, you know, a CEO wants a culture to be viewed versus some things you want. I felt like I stopped being so precious, to be honest. So what? I don't agree. I think we're probably making a mistake.

14:13Maybe there'll be consequences, but I have to just let this go. So I sort of had a rubric in my head around it. Now, I definitely also feel like, and Jessica, I don't know if you felt this way too, but I do feel like sometimes this role is the only role that tells the CEO and other people the truth. And as hard as that is, I would say I probably suffered consequences for that. And I probably got accolades for that too. I did take that seriously. And I do think this is a role that demands a very courageous leader. Yeah. No, it's not for the faint of heart. That's for sure. It is. And, you know, I think I have a similar rubric, you know, and for me, it was like you got to pick the hill you want to die on.

15:07You know, it's got to be the thing that's going to move the needle that be the most important. And those are the ones. And of course, anything on the ethical side, you're always going to fight for that. But then there's some big moments for the company where they're just wrong or they're not seeing it. And, or it's just like shit they don't care about, but it's really important. And, and you, you are the one that's the showing the mirror to them of the role that they play in it. And they're, and they just sometimes don't want to hear that. And you take, you do take lumps for that because you're like, you do.

15:43And, and, you know, you'll think you'll be with them after a meeting and you'll be reiterating what people are getting from the meeting. they're like but that's not what I said I know that's not what you said but that's what they heard okay they heard this and then they get so mad because you're the bearer of that news exactly and so you're sort of because you're the bearer of the news you get blamed for it I'm also a big believer that I don't know Beth you probably built your own art around this but if I got them to think it was their idea. Oh, I 100 % agree. Oh, no doubt. Always no doubt. So good.

16:31No doubt. And so that was a big strategy. I agree. How do I get them to think this is their idea? Because if they think it's their idea, they'll want to do it. If I tell them to do it, they won't want to do it. Totally. It's so funny because I would know. I won't say what company, but a recent company, I would know that I was actually getting through when someone would say, blah, blah, blah, use these words, which he never would have normally used those words. Those are words you say. And I'm like, excellent. I love it. That's exactly what I want to happen. Right. And that's when you know your work is happening.

17:09Exactly. Well, I also think, you know, I sort of changed my ire in many ways against leaders thinking like, why are they doing this? They don't know, you know, what are they doing? I realized that, you know, there's, I'm of an age where a lot of leaders like worked at GE and learned how to be a leader or worked at Procter & Gamble and learned how to be a leader or HP or whatever they, you know, you learned how to lead people. You learned how the importance of culture. Now you have a good idea. You're the CEO. And I now have a lot of empathy, especially for a lot of the younger leaders that I work with.

17:53Like, how do you know these things? There's no way you would. And so what I look for now when I look for a leader is, do they have self-awareness and do they have curiosity? If you have that and you know nothing, I can work with you, right? Because you want to learn, you want to get better, and you're willing to actually hear some things about yourself. And it's just hard to learn how to be a good leader unless you're put into the deep end and you have to figure it out. That's actually a great point because when I think of, since I've been in Silicon Valley for 40 years, when I first got here, you even could map all of the companies that just came out of HP.

18:38It was like literally hundreds of people, hundreds of companies. Somebody, John Freeman at UC Berkeley had an old unpublished study where he showed all. And as we know at HP in the old way, what would they do? They'd hire you as an engineer. And there were usually men in those days. And there were some exceptions. And then they'd give you one employee and they'd see if you screwed it up. And they'd train you too. And if you didn't screw it up, they'd give you a bigger team. And eventually you'd be running a division. Right. Or a business. and at some point they get an idea and spin out and start a company but that process, it might happen to Google a little bit now but it's pretty rare like you say, it tends to be young founders who have an idea and boom they've got what,$100 million or more in another company and they're often not held accountable or asked by the board about any of these people's stuff Now, I think a lot of them intuitively understand this stuff is important, right?

19:37They're, you know, knowledge, you know, you employ knowledge workers. They are your product. And so you have to understand, you know, making them work together better and make them is going to drive better outcomes. But how they how you get that done, they have no idea. And how would they? How would they?

19:57Right. How would they? But I have a question since both of you have dealt with this, and this is a modern question, which is that even more than in the past, I see employers looking for the solo superstars they want to hire. You can just see what just happened with Meta with these huge amounts they're paying for AI people. So what's your take about when you go after the stars and after you get them, what you do with them? That's a great question. It is a great question. I mean, I have always been somewhat skeptical of the star, the star model, you know, Jim Barron's old study that went on for a long time.

20:37I mean, I think because there are so, you know, the talent density with AI and ML engineers, I understand the strategy that they're doing, you know, so I think sometimes you do have to do that. And I do think you can really, if you get the right couple of right technical talent, You can attract a lot more people. So I do understand doing that. You know, what you do when you get them in, I think you have to really try to understand what motivates them and what's going to make them happy. I mean, I'm a firm believer that, you know, no one's going to turn down money, but I think most great people are not in it just for the money.

21:21They really want to do something magical. most of the really talented engineers that I know, which I'm lucky to know a lot of them, they really want to make a difference. If their product's not being used to actually do something great, they are not satisfied. So I really think you have to figure out what motivates them and give them the ability to, you know, create something that is going to, you know, be a game changer in their career. Yeah, no, I think that's exactly right. I mean, look, like, if you want the best engineering talent in AI, you have to be competitive from a conference. You do.

22:02But a star to me, you know, isn't somebody that you just pay a high price for. A star is, yeah, maybe you pay a high price for them. But they have the qualities that Beth is talking about. Like, they're driven and passionate and drooling to do what you're working on, right? And they are coming with a niche skill set that nobody else has. And so, of course, you're going to pay a premium for that person. But when you get them in, I think what a lot of organizations don't do well is they don't zone in on the passion and the drive as much as they should. And then when they get them there, a lot of these stars, they make it hard for them to do what they're there to do.

22:49Right. Exactly. And exactly. We at Netflix, we always believe like, let's hire the best. But get out of their way. Exactly. Like, let them do the work. That's what they came to do. So I think, you know, how to treat a star if you actually have one. And a real star, again, isn't just somebody that makes a lot of money. They're actually talented and passionate and driven about what you're trying to solve. And then give them the runway to do it. So, Jessica, there was another thing, at least in the famous Netflix deck, I'd like you to comment on here. Because the definition, my understanding of the famous Netflix deck, which I guess that maybe you were involved in writing that too.

23:30But I know that Patty and Reed especially were. Yep. So you would define a star not just as somebody who's great at their job, but somebody who helps other people around them succeed too, isn't that? Yeah, they had to be great not only at their craft, right, but they had to be great also at the culture, which was they had to be selfless. They had to not be an asshole, and the list goes on and on. But you were not great just because you were good at a craft, right? You had to be the full package. I see some less of that emphasis sometimes now around, you know, putting up with things from really talented people.

24:15And, you know, when I try to coach companies that I work with on, once you do it, you're sort of ruining everything. Because once you say, okay, this is our culture. This is how, you know, we reward. This is how, what we expect of you. oh, but we don't of this person. What are you saying? I mean, one of my biggest pet peeves of corporate America is hypocrisy. And I just see it all the time. And it slowly dilutes the culture. And when the culture gets diluted, the work is not as good. Again, this is not about, you know, I have a Pollyannic view of work. I don't. I'm very pragmatic. But I know that you set things up in a company to get outcomes, right?

25:06You don't do it to be nice. Maybe you're nice and you're a nice person. I am. And I care about people greatly. But the things that I've always done in companies are to get better output. And my belief is if you build trust, if they feel you care about them, if you're clear about expectations, if their work is connected to something larger than themselves and they understand how they fit in, you are going to get better work, right? And so don't, you know, I think the danger right now is, you know, getting stars that maybe are not as aligned to the culture and behaviors that you want them to be.

25:48And that eventually will cause, you know, will cause damage. Yeah. It's, I'm so glad that you said that because it's the exact same thing that I preach is that your employees are just waiting and watching for the hypocrisy. That's all they're doing. They're waiting for you to do the opposite of what you said you were going to do. You said you were going to be transparent, but you're not transparent. You said you were going to hold a high bar, except your bar for your team is different than the bar for my team. Like that's all of those things that they're just reading and watching and, and, and collecting all the data.

26:27And then the moment you do that, they're like, see, told you not true. We don't have the culture. And when people come back to a leadership team and say that, like point all the point out the hypocrisy, I usually see defensiveness, right? It's pretty rare that I see sometimes, you know what? You are totally right. Thank you for bringing that to me. We need to do better. Yeah. We need to do better. Right. And I think instead, you know, people feel attacked, but you know what? You shouldn't feel grateful that someone actually cares enough to tell you. Exactly. But I mean, the response generally is you'd understand because this person does x y and z and nobody else does right they're so important right they're so important and it's like it just makes no sense and the benefit the contrast i at least in my life and i tend to use in teaching is the difference between and and this is near and dear to my heart and maybe it's gotten better but uh at least as of 15 years ago the difference between a superstar surgeon at the cleveland clinic and in the stanford hospital is still and note i work for Stanford.

27:37And that a superstar surgeon at Stanford at least used to be and probably still is somebody who is just such a star that their team doesn't matter. All that matters is how famous they are on the outside and how many articles they publish. And at the Cleveland Clinic, a superstar surgeon is somebody who is great at supporting their team and being a good team player and not being a jerk. And at Stanford, we tend to reward the people, act like superstar jerks. And at the Cleveland Clinic, which doesn't have tenure, they fire them. And that's why I got heart surgery at the Cleveland Clinic rather than the Stanford Hospital.

28:18Note to self. They had half the risk-adjusted mortality rate at the Cleveland Clinic, too. So back to Beth's numbers. and I heard this directly after I had surgery from Toby Cosgrove, who was head of the Cleveland Clinic for some 20 years. Not the nicest guy in the world, but he ran the heart surgeons before he became head of the Cleveland Clinic. And by the way, if you talk to people at the Stanford Hospital, which I do sometimes, the most profitable part of running a large hospital is heart surgery. So that's why the Cleveland Clinic, as it was described to me recently, they make a whole bunch of money on heart surgery they make a little money on cancer and they lose money on everything else I don't know how accurate that was but I keep repeating that and nobody's correcting me that doesn't surprise me yeah that doesn't surprise me that's fascinating Beth what do you think like we have a lot of listeners who are founders we have a lot of listeners that are leaders we have a lot of listeners that are CHROs What do you think are the things that companies should be focusing on right now in order to have effective cultures that move the business forward?

29:41It was interesting how you explained your role because I always thought about my role in a similar way, but I described it as I'm the chief effectiveness officer. My job is to make us incredibly effective. Like, you know, where's the friction? Let's remove that. Where's the communication? Let's get a line. Where are the people that are performing? Get them out of here. Right. Like, how do we become more effective? So what's your perspective? Yeah, well, I think it's a lot of what you just said. I think it's interesting. Right before this, I was having a coaching call with somebody and they were telling me about how their CEO has somebody who is really ineffective, but they don't really want to do anything because it's going to take too much time and they have all this stuff going on.

30:33And I was like, absolutely not. Like, what is your CEO saying to everybody else in the company to hang on to somebody who's not a great performer because of a relationship or loyalty or whatever? Like, you were starting down a bad path here that's going to be hard to get out of. So, you know, I really think there can be a lot of very different but effective cultures. So I think one thing is decide what you want to be.